Tuesday, December 8, 2009

As Jordan mentioned in our previous post, negotiations for an unprecedented community benefits agreement (with a guarantee of living wage jobs, $10 an hour plus benefits) as part of the Kingsbridge Armory shopping mall project are about as fluid as the Bronx River at this point.

But this is what we know as of 6:08 p.m. on Tuesday, with a vote on the project scheduled for tomorrow afternoon.

The Bronx Council delegation met with Related representatives (the Armory's designated developer) and Deputy Mayor (for economic development) Robert Lieber on Friday. Related/Lieber laid out a proposal they were comfortable with. But the proposal didn't "mandate or guarantee living wage. Not something the delegation was interested in," said Council Majority Leader Joel Rivera in a text message over the weekend.

Yesterday, at a meeting with Related/Lieber at 12:30 p.m., the delegation responded with a deal that would effectively subsidize living wage jobs at the Armory shopping mall without forcing retail tenants to pay the full wage themselves. These were the main points outlined in the deal:

language in leases mandating participation in providing living wage to all employees (for all retail tenants).

The City will subsidize the living wage via a funding pot; the full purchase price of the Armory ($5 million) will be the initial funding for the pot.

And increase of community space from 27,000 sq. feet to 45,000 sq. feet, which would help fund the living wage pot over time.

Now, according to one council staffer at the meeting, Lieber said any mandate that tenants would have to pay a living wage would be a non-starter, which has been the consistent position of Related and the Bloomberg administration since the beginning.

However, the staffer said Rivera told Lieber that the delegation's proposal was not simply a mandate. It would, in essence, be a nonprofit fund created to subsidize wages at the Armory. This would eat into Related's profit, but not the bottom line of retail tenants.

This is where it gets interesting. Related lawyer and lead negotiator Jesse Masyr has made it clear that Related's stance against a living wage mandate wasn't about Related's profit margin, it was about not being able to attract tenants to fill the building.

Masyr has said all along that he couldn't put requirements and/or restrictions on tenants when they could easily set up shop somewhere else (across the street, Westchester County, etc.) in a situation where they wouldn't have to deal with those requirements. And if Related couldn't attract tenants, Mayr reasoned, they couldn't secure a loan for the $300-plus million they would need to build out the shopping mall.

The delegation's plan appears to have rendered Related's argument moot. The burden would be on the city (to give up the $5 million for the sale of the Armory) and Related (to give up additional space and a percentage of rent profits), not retail tenants.

Based on the progress made yesterday, delegation members were looking to postpone the scheduled vote on the Armory to allow for more negotiations. Perhaps until Monday, the deadline for a decision on the Armory project by the Council. Another option, that Rivera has posited recently, would be to modify the proposal and send it back to City Planning, which would push the vote back even further, to Dec. 21.

Today, Related came back with a counter-proposal, though delegation members are keeping quiet about what that contained. Delegation staffers would only say that negotiations were "ongoing."

There's no word as of yet on whether the vote's being pushed back or if a deal has been struck. As Bret Collazzi, a spokesman for Bronx Council member Jimmy Vacca, put it to me in an e-mail, "this may go to the wire."

One other note: The Kingsbridge Armory Redevelopment Alliance (KARA) is treating tomorrow as if the vote will happen and is continuing to urge the Council to vote down the proposal if it doesn't contain a strong CBA that includes living wage job guarantees, among other benefits.

To fortify this effort, they've also undertaken a massive letter writing campaign (incorporating the supportive letters of clergy from throughout the city) outlining their stance on living wage.

They'll also be at City Hall tomorrow, with a press conference featuring Stuart Appelbaum of the Retail, Wholesale and Department Store Workers Union (RWDSU, KARA's biggest ally) scheduled for 3:30 p.m.

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